According to the supply chain professionals’ qualification body the CIPS, input prices for the UK services sector rose to the highest level in 3.5 years in September.

The Markit/CIPS Purchasing Managers’ Index indicated that growth slowed in September though a weakened Sterling exerted upward pressure on input prices that hit a high that unseen since February 2013.

David Noble, group CEO, CIPS, said: “Firms raised their prices in response, to counteract increased costs for fuel, food and elevated wage bills and as the weaker pound had an effect.”

The CIPS index slowed to 52.6 in September, down on 52.9 in August and against the neutral reading of 50, which signifies neither growth nor contraction.

New business saw a strengthening trend according to survey data, as this rose at the fastest pace since February as firms reported new opportunities as well as customer enquiries.

Sentiment was the strongest in three months but still weak in the context of historic data as companies reported ongoing uncertainty over the implications of Brexit.

Noble said: “Though business optimism improved further from July’s seven-and-a-half-year low, and was the strongest for three months, disquiet around Brexit still remained. The sector concentrated on stabilising rather than forging ahead with confidence, as optimism stayed below the long-term average.”

Chris Williamson, chief business economist at IHS Markit, said: “The solid PMI readings for September will cast doubt on the need for any further stimulus from the Bank of England in coming months.

“It’s clear, however, that the pace of expansion has cooled since the first half of the year, reflecting widespread concern about the potential future impact of Brexit. As such, the economy remains vulnerable to further setbacks and the need for policy action later in the year cannot be ruled out.”
 
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